Wed, Apr 24, 2019 - Page 11 News List

Loan market boosted by offshore wind farms

Bloomberg

After marking the best start in seven years, Taiwan’s booming loan market is about to get a further fillip.

Jumbo financings for offshore wind farm projects are expected to drive syndicated loan volumes this year, CTBC Bank (中國信託銀行) said.

The nation’s bid to coax its businesspeople to bring back home billions in overseas assets is also set to stimulate the economy, helping to support loan demand, it said.

“The pipeline will maintain its smooth momentum going forward,” CTBC Bank head of corporate finance Phoebe Li (李靜婷) said.

The offshore wind power projects could provide “some energy” to the syndicated loan market in the second half of the year, she said.

The government estimates the wind power projects could draw investments of as much NT$962.5 billion (US$31.19 billion) over eight years, according to a plan announced in April last year.

That could revitalize an economy threatened by the US-China trade dispute and slowing global demand for high-tech products.

Taiwan also earlier this year raised its feed-in tariff rates for offshore wind power to help lure more investments.

That is good news for the syndicated loan market where borrowers raised US$8.1 billion during the first quarter, the best since 2012, data compiled by Bloomberg showed.

Both local and foreign banks are eyeing project financings for offshore wind farms.

Copenhagen Infrastructure Partners has sent out a request for proposals for a loan of up to NT$69.8 billion to back its offshore wind farm projects in Changhua County.

Last week, the Cabinet passed a new tax to encourage Taiwanese businesspeople to repatriate assets held overseas.

According to a report by UBS Group AG, Taiwanese have US$500 billion in overseas assets, the third-highest offshore holdings in the world after China and the US.

The fund repatriation could lead to more investments, hence more demand for loans.

As most of the renewable energy loans have yet to close, the strong loan volume so far this year has been mainly driven by overseas acquisitions by technology companies, refinancing needs and investment by manufacturers, Mega International Commercial Bank (兆豐銀行) said in a written reply to Bloomberg.

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